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GURUGRAM: Municipal Corporation of Gurgaon (MCG) has started the process of identifying and marking its properties within the city in a bid to curb land grab cases.
A unique code will be attached to all its properties, including empty plots and buildings.
According to sources within MCG, the corporation will mark more than two-and-a-half-thousand acres of land in the city to keep a track of its assets. As of now, the corporation only has documentary records of the same. The unique codes will be updated in the MCG online database.
“Once we have identified the properties, we will generate a unique code for each property and update that in our database with the deatils of status and ownership of that property. This will help us monitor our assets in a much more efficient manner,” said an MCG official. He added that the process of identifying and marking properties had already begun and the planning wing of the corporation planned to finish the exercise in the next 15 days.
In the empty plots, MCG will also put up boards, specifying it is the corporation’s land. According to sources, MCG currently owns about 2,500 acres of land in the city and of this, at least 196 acres has been encroached upon. MCG is also thinking of ways to utilise the empty properties so that it can save them from encroachment, and also generate some revenue. Land encroachment is a major issue for the corporation as it not only leads to revenue loss but also gives it a bad name.
Additionally, the anti-encroachment drives demand a lot of manpower and other resources. Recently, a land grab case in Sector 72 landed in the National Green Tribunal (NGT). An unauthorised colony had come up on land earmarked as open space. In April, MCG had found out that around three acres of its land in the Baliawas village had been grabbed by seven people in connivance with the tehsil officials. An inquiry in the matter is currently under way.
Sources: realty.economictimes.indiatimes.com

MUMBAI: Mutual funds and non-banking finance companies (NBFCs) are getting the shivers over possible adverse investor reaction to sharp downgrades of Reliance Home Finance (RHFL) and Reliance Commercial Finance (RCFL) debt instruments stemming from the financial status of the indebted Anil Ambani-led Reliance Group.
The market has been jittery since the shock default by Infrastructure Leasing & Financial Services (IL&FS) in September last year sparked a liquidity crisis that hit NBFCs. One of the ripple effects has been the inability of some mutual funds to make payments on time to fixed maturity plans subscribers after investing in unsecured corporate debt.
Borrowing costs may rise and liquidity may shrink in the debt market with key investors such as mutual funds holding back on investments. Fund houses may also raise their cash position, expecting a surge in redemptions as in the aftermath of the default by IL&FS. “Whenever there is a default, lenders tighten norms of lending,” said Mahindra Finance managing director Ramesh Iyer.
Rs 2,600-cr exposure in RHFL, RCFL
“Two things will happen — first money becomes costly and second it may not be available for all. Lenders may characterise risks differently and some people might find it difficult to raise funds. NBFCs with good ALM (asset and liability) norms are able to borrow based on fresh disbursement needs,” he said.
Rating cut for two Reliance group company papers alarms market
The differential between triple-A NBFCs and non-triple A ones is now in the range of 60-100 basis points compared with 20-40 basis points before August last year, traders said. The gap may widen further by 20-30 basis points. One basis point is onehundredth of a percentage point.
“There seems to be some pressure on rates and liquidity, which are already in deficit in the banking system,” said Aditya Birla Mutual Fund CEO A Balasubramanian. “Fund managers will be more judicious in subscribing to debt paper. The Reliance Group’s exposure to mutual funds is nothing fresh but was from the past before August last year.”
The silver lining is the magnitude of investment will not be as large as that of IL&FS. Unlike IL&FS or Zee, fund managers have already factored in negative news flows amid lingering troubles for the Reliance Group, which includes Reliance Communications.
Mutual funds are estimated to have over Rs 5,000 crore invested in eight Reliance Group companies, of which nearly Rs 2,600 crore is in RHFL and RCFL securities. Reliance Mutual Fund holds about twothirds of the two companies’ bonds, according to a market estimate.
“Borrowing cost may go up in the short term highlighting weak players in the market,” said Value Research CEO Dhirendra Kumar. “The extinction of unfit is a natural course. Darwin’s theory (survival of the fittest) is finally at work in India.”
RHFL and RCFL have delayed bank loan repayments.
“If a sector is mired in default, lenders are not willing to lend to them,” said PNB Housing Finance managing director Sanjaya Gupta. “If there is a shortage of credit, it will lead to consolidation in financial initiations.”
Care cut RHFL’s rating to D for default from BBB+ as the company failed to repay bank loans on time.
“There has been rescheduling of repayment in one of the bonds issued by RCFL,” said Ravi Kumar, analyst at Care Ratings. “Other instruments downgraded have high risk of default given the weakening of the credit profile of the companies.”
Care also downgraded an RCFL nonconvertible debenture (NCD) series worth Rs 200 crore to D from BBB+ on which there has been a mutually agreed deferment in repayments. Payments due on April19 have been deferred to September. Besides, the rating company has downgraded various NCDs/other credit facilities mostly to C (junk status) from BBB+.
The two companies have been trying to sell good-quality loan portfolios with both raising nearly Rs 8,000 crore from such efforts in the past six months. They aim to raise about Rs 500 crore every month, said a company spokesperson.
RCFL and RHFL expect to regularise all repayments shortly, they said in statements on Saturday.
The companies “have been affected by a timing mismatch in regard to the ongoing further securitisation / monetisation proposals with banks, etc., and the same has resulted in minor delay on principal repayments,” Reliance Capital said.
“NBFCs’ liquidity has been tight for the last six-seven months and people are risk averse due to elections,” said Karthik Srinivasan of ICRA. “People will continue be cautious.”
Rating company ICRA also cut RHFL’s commercial paper programme to A4 from A2 earlier.
Sources: realty.economictimes.indiatimes.com

The Maharashtra Real Estate Appellate Tribunal (MREAT) has set aside two MahaRERA orders which had asked L&T Parel Project to pay a compensation of Rs 2 lakh for ‘harassing’ home buyers, and directed the developer to reduce the price of the flat since its carpet area had been reduced.
The tribunal presided over by a bench consisting of Chairperson Justice (retd) Indira Jain and Member, Administration, SS Sandhu, also held that the home buyers, Alok Kejriwal and son Akshat Kejriwal, were guilty of suppressio veri (suppression of truth), and asks them to bear the cost of the litigation.
The case relates to a complaint by Kejriwals, who had booked flat 2804 in L&T’s Crescent Bay project in Parel, alleging that the developer had reduced the carpet area given in the allotment letter when they registered the project with MahaRERA and hence price of the flat should be reduced. In December 2018, MahaRERA Member Bhalchandra Kapadnis had relied upon a report by authority’s technical officer which said that developer told the Kejriwals that the area of the flat is 119.69 sq m when the correct area by RERA definition should have been 112.06 sq m, and recommended a proportionate decrease in the cost of the flat. Kapadnis had ruled in favour of home buyers and imposed a penalty of Rs 2 lakh for harassing them. He had also, on developer’s plea, allowed L&T to either abide by his ruling or refund the entire Rs 6.53 crore paid by the home buyers.
L&T Parel Project challenged both September and December 2018 orders before the tribunal. The developer advocates Naushad Engineer, Chirag Kamdar and Abir Patel contended that the home buyers had suppressed material facts. They submitted that in April 2015, Kejriwalas had booked flat 2704 in their joint names following which an allotment letter was issued on July 7, 2015. They were asked to register the agreement for sale, but Kejriwals postponed the registration citing personal reasons. In February 2017, they approached the developer again requesting a floor rise and shifted their booking from flat 2704 to flat 2804 on the 28th floor. They said in 2015 the carpet area was calculated as per existing Maharashtra Ownership of Flats Act and RERA methodology excludes balconies from its carpet area definition and hence creates an impression that 7.63 sq m or 82.17 sq ft has been reduced, there is no reduction of flat area. They argued that both flats were identical and except floor rise, there is no change in flats.
Ruling that the home buyers could not establish reduction in area of flat 2804 as alleged, the tribunal members said that the MahaRERA orders of September and Decemebr 2018 were not sustainable in law.
When contacted, Advocate Sunder Bhandary, who appeared for the Kejriwals, said “We are not satisfied with the tribunal’s ruling. RERA definition of carpet area excludes balconies and how can they that area be included then. The tribunal did not consider this, and we will go in second appeal to the Bombay High Court.”
Sources: realty.economictimes.indiatimes.com

MUMBAI | BENGALURU: Indian commercial real estate market is likely to provide 294 million sq ft of space that can be listed under Real Estate Investment Trusts (REITs) valued at $35 billion from the existing office stock, said a JLL India report.
Rising transparency levels, progressive regulations, and a robust commercial real estate market in the country have made the segment a favorite among institutional investors, who have allocated nearly $17 billion in the form of direct investments as well as through entity level investments from 2006 to 2019 in the office space.
India has already seen its first REIT listing from Embassy Group-Blackstone joint venture last month. With a portfolio of 32.6 million sq ft, the listing is also Asia’s largest in area terms of area.
“The listing of India’s first REIT heralds the institutionalisation of real estate assets and indicates enhanced maturity and professionalism in real estate market. Growing knowledge of REITs will ensure acceptability and gradual increase of interest from retail investors. We expect to see other asset classes like retail, warehousing and hospitality also offering REITable assets in the times to come," said Ramesh Nair, CEO & Country Head, JLL India.
With 33% share of REITable space, Bengaluru will provide the highest REITable assets totalling 97.8 million sq ft, worth $10.7 billion. Mumbai follows Bengaluru with 17% share of total REITable space at 49.7 million sq ft worth $8.6 billion. Delhi-NCR and Chennai follow Mumbai both in space and value terms, the report said.
“Indian office space holds the potential to offer additional 101 million sq ft of office space for REIT from the new office completion expected during 2019-21. This could help upcoming REITs to gain from upside in rentals as well as capital appreciation,” said Samantak Das, Chief Economist and Head of Research & REIS, JLL India.
According to Das, while the strong institutional flow of funds into real estate will continue to provide initial momentum towards REITs’ growth in the country, active participation of insurance and pension funds in future will help in long term growth of the market.
With large and quality IT spaces occupied by prominent global players, Bengaluru will be the most favored city for REITable assets. Presence of single-ownership ready properties make it easier to aggregate the assets and manage them for REITs.
Emergence of new office space occupiers, continued demand from IT/ITES, global in-house centres along with the BFSI space is expected to keep office space demand robust over the next 3 years.
Sources: realty.economictimes.indiatimes.com

GURGAON: Homebuyers of CHD Resortico, name changed to CHD Y Suites, in Sector 34, Sohna, have been running from pillar to post, seeking refund of their investment. The developer launched pre-bookings for a residential project, including 1BHK and 2BHK flats, in October 2013. However, in May 2015, the project was changed to a commercial one with 1BHK serviced apartments.
Sumit Dwivedi, who gave Rs five lakh as pre-booking amount for a 2BHK flat in October 2013, has not got a refund yet. “I booked a 2BHK flat in CHD Resortico on Sohna road in 2013. However, the allotment agreement shows that the developer gave me two 1BHK flats. That too, these flats are commercial or serviced apartments. The developer said that it couldn’t get a licence for the 2BHK flats. Since then, I have been asking for a refund but all in vain,” he said.
Some of the homebuyers have approached the Delhi state consumer disputes redressal commission with their grievance.
An FIR has been filed against the developer in the Bhondsi police station under provisions of both imprisonment and penalty under Section 7(i) and Section 10 (1) of Haryana Development and Regulations of Urban Areas Act, 1975. “We have complained against the developer to different authorities, including police and department of town and country planning (DTCP), but have got no relief, till now.
An FIR was registered in 2018 against the developer but relevant IPC sections of 420 (cheating),406 (criminal breach of trust), 384 (blackmail and extortion), and 120B (criminal conspiracy) were not mentioned there. Police deliberately did this so that the developer could escape. I have filed complaints on the CM’s window, seeking the inclusion of relevant sections in the FIR,” said Rajesh Wadhwa, a complainant and homebuyer.
“We booked a residential apartment in 2013 to have a roof over our heads, which turned out to be a commercial apartment in 2015. Initially, the developer took Rs 2.5 lakh from me and then Rs 3.3 lakh in 2015. Why should I live in a commercial property and pay hefty electricity bills and huge taxes? Despite several complaints, there has been no action against the developer,” said Inder Raj, a senior citizen and homebuyer.
Homebuyers are now demanding cancellation of licence and strict action against the developer . “We want the developer to be booked and our refund, along with interest and compensation, to be handed over,” said Akash Tiwari, another buyer.
Despite repeated attempts, the developer denied to give any comment on the matter.
Sources: realty.economictimes.indiatimes.com

GURUGRAM | NOIDA: Developers should not repay loans taken from banks and financial institutions by using 70% of the total amount collected from buyers and allottees of a project in escrow accounts, both HRera and UPRera have ordered. This amount is meant to complete construction of the project and meet the land cost, the regulatory authorities said.
In a case in Gurgaon, the local bench of HRera has directed the police commissioner to register a criminal case against Indiabulls Housing Finance Limited, Industrial Finance Corporation of India Limited and PNB Housing Finance Limited for using money from the 70% of the amount collected from buyers and allottees, which it said should be used to complete construction of the project as per the Rera Act.
HRera’s Gurgaon chief KK Khandelwal said it is probably the first-of-its-kind decision since the regulatory authority is constituted, in which it has asked the police to initiate action against the financers of the realty project.
The authority has taken a serious note of the fact that lending institutions “fraudulently and arbitrarily withdrew 100% of the receivable deposited in the Rera account in violation of Section 4(2)(l)(D) of Rera, 2016”.
According to the Rera provision, “70% of the amounts realised for the realty project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a bank to cover the cost of construction and the land cost, and shall be used only for that purpose.”
The builder can use only 30% of the amount collected from allottees for other purposes, including creating charge in favour of lending institutions to repay loans.
In the normal course, lending banks and institutions get repayment of their loans from the escrow accounts opened by developers where all the receivables get deposited.
If the collection from allottees in a particular month is less than the installment supposed to be paid to lending banks and institutions, the entire amount in the escrow account goes to lenders. But this leaves the project high and dry owing to cash crunch, and the construction could be stalled.
Khandelwal said before making a provision for any purpose, 70% of the money collected from allottees must go to another escrow account, which should be called Rera account, to be maintained for the purpose of construction of the project and meet the land cost under the supervision of Rera.
Khandelwal said the developer “cannot create lien on the project” to raise money for a purpose other than completing construction of a project.
He also said the provision in law is to address the mischief, earlier being committed by unscrupulous builders to divert amount realised from the allottees to other projects or for different purposes other than the project, for which amount has been deposited by the allottees.
UP Rera in a letter to various banks said, “It is obligatory both for the promoter and the bank to ensure strict compliance of the above stated provisions of the Rera Act.”
UP Rera also pointed out that some of the banks, especially those which have sanctioned loan to promoters, arbitrarily adjust the entire amount deposited in the account against the outstanding loan of the promoter, instead of transferring 70% of the money collected to the escrow account for the purpose of construction and payment of land cost.’’
He also said HRera has issued strict directions to these financiers to deposit back the excess amount withdrawn by them in violation of the statutory provision of Rera, 2016. Also, a show cause notice has been issued to the developer, asking it why penal proceedings should not be initiated against it for violating the provisions of the Act and in particular section 4(2)(l)(D).
Sources: realty.economictimes.indiatimes.com

MUMBAI: The Indiabulls Group is believed to have sounded out joint venture partner Blackstone and other leading players such as Godrej Properties to offload its stake in Indiabulls Real Estate (IBREL).
Distancing the group from realty is expected to improve the chances of obtaining regulatory approval for the proposed merger of Indiabulls Housing Finance with Lakshmi Vilas Bank (LVB).
“Blackstone understands the business, and by virtue of being a strategic partner, is familiar with all the assets of IBREL. So, it’s a natural choice. No deal with anyone has been finalised, but discussions with Blackstone are at a more advanced stage,” a person familiar with the strategy told ET.
The promoters’ stake in Indiabulls Real Estate stands at 38.8% — valued at Rs 1,838 crore. If a deal fructifies, it would trigger an open offer by the acquirer.
The promoters, according to sources, have approached Blackstone to sell their entire stake. Sources said Godrej Properties may team up with two PE funds if it steps in to buy out the IBREL promoters.
Emails to Indiabulls and Blackstone went unanswered till the time of going to press while a spokesperson for Godrej Properties said the company “does not comment on market speculation”.
Soon after the boards of LVB and Indiabulls Housing Finance announced the merger proposal, Indiabulls Group chairman Sameer Gehlaut had indicated the founders were ready to relinquish their promoter status in Indiabulls Real Estate and dilute their stake.
It’s widely perceived in the industry that Indiabulls’ current priority is to stabilise its financial services businesses in a market that has become comparatively tougher for many non-bank entities. “Also, the contribution of real estate to the group’s revenues has come down significantly,” said an investment banker.
Blackstone had invested Rs 2,500 crore for a 50% JV with IBREL that divested half its stake in commercial properties such as ‘One Indiabulls Centre’, ‘Sky forest’, ‘Sky’ and ‘Indiabulls Finance Centre’ at an enterprise value of Rs 9,500 crore in March 2018. These properties have a total leasable area of 4.14 million sq ft and are expected to generate annualised annuity revenue of Rs 890 crore from FY21-22, according to IBREL’s FY18 annual report.
Besides the JV with Blackstone, IBREL has a development portfolio of 28.5 million sq ft and rental portfolio of 5.2 million sq ft.
“In examining the merger proposal, RBI would look at the resultant shareholding structure, run a fit and proper exercise on shareholders with more than 5% stake and look into their right to nominate director in the merged entity to decide on whether they can continue as major shareholders in the entity,” said former deputy RBI governor R Gandhi. “The current policy does not have any reservations about real estate exposure,” he said.
According to banking sources, as against the original idea of merging the bank (a much smaller entity) with the larger Indiabulls Housing Finance and obtaining a licence for the merged entity, RBI may prefer a plan that entails the merger of the housing finance company into the bank.
The new on-tap licence norms say that corporates with assets of at least Rs 5,000 crore and a successful track record spanning 10 years are qualified to apply for a banking licence.
Sources: realty.economictimes.indiatimes.com

NEW DELHI: SpringHouse, a Delhi-based co-working firm, is looking to open 8-10 centres by December 2019, said
Mukul Pasricha, founder & CEO of the company.
Most of these new centres will be located in the National Capital Region. It currently has 15 operational centres across NCR.
"Apart from NCR, we are also looking at Bengaluru. We plan to open a centre their by September 2019. In Bengaluru we would be looking to open 20,000-25,000 sq ft space," said Pasricha.
The company is also looking to raise Rs 15-16 crore post September 2019. "As of now we are bootstrap but as and when we start scaling up further, we would be looking to raise funds," he added.
In the financial year 2019, SpringHouse generated a revenue of Rs 6 crore and is now targeting a revenue of Rs 12 crore by December 2019.
By June, the company plans to open two new centres in Gurugram; one of them is in MG-Road spread across 30,000 sq ft with a seating capacity of 500 while the other is situated in sector 44, Gurugram. It is spread across 10,000 sq ft and will have 135 seats.
It also opened a centre in Noida Sector 16 with 350 seats. The 23,500 sq ft space is taken up from Pioneer House.
Sources: realty.economictimes.indiatimes.com

GURGAON: Over 400 homebuyers and residents of three different projects in the city staged protests against the developers and RWA on Sunday. The protesters had similar grievances — financial irregularities and delay in possession by the builder.
On Sunday morning, hundreds of residents of Mahindra Aura in New Palam Vihar staged a protest at the society clubhouse against the “malpractices and financial irregularities” conducted by their RWA.
Aura residents said they had brought a no-confidence motion and dissolved the current RWA by calling a special general body meeting on September 16 last year, but the RWA continues to hold financial powers.
“The RWA office bearers have, in collusion with the district registrar office, carried out several illegal activities, including replacement of security agency at a higher cost, increasing maintenance charges and installing poorly-planned CCTV cameras at a cost five times greater than the market rate,” said Tej Malik, a protester.
Mahindra Aura RWA president Yashish Yadav said the matter is in court. “A group of residents are harassing RWA office bearers,” he said.
Meanwhile, around 200 buyers of Greenopolis housing project in Sector 89 protested at the New Delhi residences of the directors of developer Orris Infrastructure, Vijay Gupta and Nirmal Singh. The buyers alleged that the builder has stopped meeting them after taking their money despite the project being way past its 2016 deadline. An Orris representative said he couldn’t comment on the matter as the case is with Rera.
Around 100 homebuyers of Shree Vardhman Flora also protested against the developer at the project site in Sector 90 against the delay in completion. “No work is going on at the site and completion doesn’t seem likely in the near future,” said Shambir Yadav, a buyer. Vardhman spokespersons didn’t revert to messages sent by TOI.
Sources: realty.economictimes.indiatimes.com

GURGAON: Hundreds of homebuyers, who had invested in the Petioles GreenParc II project, being developed by the SARE group, are uncertain about getting possession. Spread across seven acres, the project was launched in June 8, 2012, and has a total of six towers.
Most of the homebuyers had booked their flats in 2012 itself and the developer had promised to give possession in December 9, 2015. However, four years after the deadline, buyers are still waiting for their homes.
The project is around 95% complete but the last leg of the work is not being completed, according to buyers. Alok, one of the homebuyers, said that he had booked his flat in the project through the construction-linked plan (CLP) for payments. “In the agreement, possession date was set at thirty-six months from the date of commencement of construction, with a grace period of six months,” he said, adding that the construction had started on time and the homebuyers should have got possession, by now.
Another homebuyer, Harsh, said that the developer had already taken 95% of the total payments but showed no sign of completing the project. “All homebuyers have been kept in the dark and nobody knows where our hard-earned money has been diverted,” he said, adding, “What has also come to our notice is that the developer committed financial fraud, showing some sold properties as unsold. The developer had collected 95% of the total payments on these units from homebuyers but mortgaged the same to lenders, without providing any visibility on receivables,” he said.
As a last measure, the homebuyers have filed a legal case against the builder for the unreasonable delay in completing the project. “Another fact that has left us shocked is the shameless reply from the developer in the legal case. Instead of providing timelines and showing intention to deliver the flats, the developer claimed that the complaint was baseless and stood no ground,” Harsh said.
The homebuyers alleged that it looked like the developer was not scared of the law and was intent on robbing them of their hard-earned money. Anand, who invested in the project in 2012, said that it was important to teach such developers a lesson and take stringent action against them to save homebuyers from further mental agony.
The spokesperson for the company said that the developer was hopeful of handing over flats latest by October, this year.
Sources: realty.economictimes.indiatimes.com

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